Tax News - Law on complaints

The Act XXV of 2023 on complaints, public interest statements and the reporting of abuse has entered into force on 24 July 2023. The law requires that companies with at least 50 employees are obliged to operate a system for the reporting of abuse, regardless of the type of their activity. The deadline to begin operation of the system is 17 December 2023. The same system must be operated by financial service providers – especially credit institutions, accounting and auditor firms, and lawyer firms – as of 24 July 2023, regardless of the number of employees.

The purpose of the law is to enable employees to report any violations of law that have come to their attention via an internal abuse reporting system, whether they are corruption, economic or personal in nature. The system may not be used to report illegal activities related to one’s private life. The aim of the regulation is to ensure effective handling of reports and to protect reporters against any detrimental consequences.

The first to do when setting up the reporting system is to create an internal procedure and regulation. As part of this the individuals responsible for the operation of the system shall be appointed, who may be from within the company or from the outside. Employees must be informed about the system via internal training. If the company does not investigate a report in due time, then the reporter may come to the public. Special attention must be paid to data protection and to protect the identity of the reporter.

The report itself may be about a perceived illegal act or omission, or other type of abuse. The reporter may be a former or a prospective employee, too. The reporter may not receive any negative treatment due to the report. The report is informal. The employer is obliged to investigate reports within 30 days. Reports must be handled effectively.

The operation of the system is controlled by the employment supervisory authority, and in case of any violations of law it may apply sanctions, which may not be a fine or prohibition from activity.